Car Decision Reference 2022-0266

• Case Outcome: Upheld
• Subject Matter: Car
• Reference: 2022-0266
• Date: 16 August 2022
• Finantial Sector: Insurance
• Conducts Complained Of: Claim handling delays or issues,Dissatisfaction with customer service , Failure to process instructions, Failure to provide correct information, Rejection of claim

Decision Ref:

2022-0266

Sector:

Insurance

Product / Service:

Car

Conduct(s) complained of:

Claim handling delays or issues

Dissatisfaction with customer service

Failure to provide correct information

Failure to process instructions

Rejection of claim

Outcome:

Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant held a Premier Cover Mechanical and Electrical Breakdown Insurance for

New and Used Cars and LCVs Policy (‘the policy’) with a named Insurer for the policy period

8 December 2018 to 17 December 2020. This policy was underwritten by the Provider and

provided the Complainant with mechanical breakdown cover, in respect of his vehicle. This

complaint concerns the Provider’s decision to decline the Complainant’s claim arising from

a mechanical fault to the reduction gear of his vehicle.

The Complainant’s Case

The Complainant says that in June 2020, following a mechanical breakdown fault with his

vehicle, a four wheel drive diesel hybrid, he submitted a claim, along with a diagnostic report

from the main dealer garage that set out the fault, as follows:

“Hybrid mode not operating

When zev selected centre display shows that electrical mode unavailable. Carry out

diagnostics with PPS. Fault P1ABF reduction gear fault issue. Carry out checks to

wiring and hybrid components all tested ok. Fault lies with reduction gear”.

Following its claim assessment, the Insurer emailed the Complainant on 16 June 2020 to

advise that it was declining the claim.

- 2 -

/Cont’d…

The Complainant was advised that the claim was declined because the electric reduction

gear is excluded from cover, by way of the ‘Electric Vehicles’ subsection of the ‘Applicable

To All Cover Levels’ section at pg. 6 of the Mechanical and Electrical Breakdown Insurance

for New and Used Cars and LCV’s Policy Booklet (‘the Policy Booklet’), and also because it

was not listed as specifically covered by way of the ‘4x4 Transmission’ subsection of the

‘Premium Cover’ section at pg. 10 of the Policy Booklet.

The Complainant submitted a complaint by way of email on 17 June 2020 and this was

forwarded to the Provider for its consideration.

The Complainant also submitted a further diagnostic report from the main dealer garage

that set out the fault and the cost of repairs, as follows:

“Hybrid mode not operating in 4x4 or ZEV mode.

When zev or 4x4 mode is selected centre display shows that electrical mode is

unavailable with the selector light returning to auto. Carry out diagnostics with pps.

fault issue which means that hybrid and 4x4 mode are inoperative. While the

reduction gear is a mechanical part it is part of the hybrid transfer box which engages

the hybrid and 4x4 mode.

Reduction gear €1633.16

Gear €83.55

Gear oil €67.02

Labour 7hrs @ €110 - €770

Total €2533.73 ex vat”.

Following its complaint review, the Provider wrote to the Complainant on 29 July 2020 to

advise that it was satisfied that the claim had been assessed correctly and that it was

standing over the decision to decline indemnity because the part of the vehicle for which

the claim was being made, is not included in the ‘Premium Cover’ provided by his policy.

The Complainant submits in the Complaint Form he completed that:

“… Since the rejection of the claim by [the Provider] the reduction gearbox has been

removed from the Car and dismantled. Upon inspection it was determined that a ball

bearing in the rear reduction gearbox has suffered a mechanical breakdown …

For the avoidance of any doubt…the mechanical breakdown the Car suffered is due

to a sizeable metal ball bearing contained in a heavyweight metal mechanical

gearbox and not (as [the Insurer and the Provider] make out) and (sic) electrical part

or component …”

The Complainant says that the Provider was incorrect to classify his vehicle as an electric

vehicle and to then contend that cover is excluded by way of the ‘Electric Vehicles’

subsection of the ‘Applicable To All Cover Levels’ section at pg. 6 of the Policy Booklet.